Markets turn to Trump for clarity

11 January, 2017

The rising uncertainty and growing unease ahead of Wednesday’s news conference by President-elect Donald Trump has left financial markets on high alert. Global stocks could be pressured further by depressed oil prices while investor jitters should limit upside gains today. Although Asian shares were mostly positive on Wednesday, there is a threat of European markets falling victim to risk aversion amid the anxiety. Wall Street may turn to Trump for further clarity this evening on how his fiscal policies could boost US economic growth. With Donald Trump already labelled as a renowned market shaker, market participants should keep diligent and be prepared to expect the unexpected.

Sterling remains vulnerable

There is a risk of the hard Brexit fears becoming the dominant theme that ensures Sterling remains depressed for prolonged periods. Although UK economic data continues to display resilience against the Brexit turmoil, the persistent Brexit induced uncertainty has effectively dented investor attraction towards the Sterling. Investors may direct their attention towards the UK manufacturing production report which may provide additional clarity on how the industry has fared against Brexit. While a positive manufacturing production figure may provide the Pound bulls with a temporary lifeline in the short term, sellers may exploit this opportunity to install renewed rounds of selling. The heightened fears over the UK experiencing a rough exit from the European Union have made bears ruthless this week with sellers eyeing 1.2100 and 1.2000 respectively on the GBPUSD.

Currency spotlight – EURUSD

When dealing with the EURUSD it’s all about the divergence in monetary policy between the Federal Reserve and European Central Bank. This currency remains fundamentally bearish and technicals on the daily charts also fulfil the prerequisites of a downtrend. Uncertainty and political risks in Europe should subdue the Euro while prospects of higher US rates have made the Dollar king. Technical traders could exploit the breakdown below 1.0500 to attack the EURUSD back towards 1.0350.

Commodity spotlight – Gold

Gold edged higher during early trading on Wednesday as uncertainty ahead of Trump’s news conference attracted investors to safe-haven investment. A touch of Dollar weakness has also provided some inspiration for bullish investors to send prices higher towards $1188 as of writing. Although the yellow metal has the ability to experience further short term gains depending on the outcome of today’s news conference, the bias still points to the downside. Gold remains gripped by rate hike expectations in the medium to longer term with the current technical bounce seen as an opportunity for longer term bears to attack.


Source link  
Risk appetite returns as shutdown ends

The rally in Asian equities resumed on Tuesday taking the lead from Wall Street after U.S. government shutdown came to an end on Monday. Although...

Global equities hit by bearish pressure

Global markets took a sharp U-turn as the markets were in turmoil on the back of large crypto currency sell offs caused by regulation fears and a crackdown...

Dollar stabilizes after four days slide

The greenback’s sell-off paused early Tuesday after touching its weakest level since January 2015. Traders have been selling the buck across the board...


US equities hit another record high

The US markets have continued their hectic pace this year as the S&P 500 reached new highs on the back of economic figures. These figures showed...

Fixed income markets to dominate FX

The outstanding performance for equities which sent many major indices to record highs may have just paused. Asian stocks were trading broadly lower...

How longer the tired bull will keep running?

Led by Wall Street, global equity markets continued to enjoy one of their best starts in eight years. The Japan’s Nikkei 225 marched to a new 26-year high...


Critical week for dollar after a fragile start

After having the worst annual performance since 2003, the dollar continued to struggle in the first trading week of 2018. The dollar index fell to...

Robust economic growth

Equity investors across the globe are finding no reasons to take profits after an excellent performance in 2017. Asian stocks are trading at record highs after...

FOMC minutes - Will dollar bulls attack?

Investors kicked off 2018 on a positive note sending U.S. stocks to fresh highs on the first trading day. The optimistic approach on day one was...

  


Share: